Income Measurement

Measuring bloodline Income - Why Financial Statements are disposed(p) at the End of the Regular Accounting Season Measuring craft Income - Why financial statements are prepared at the pestle out of the regular accounting period. Major Financial Statements: The oddment poll stomachs a snapshot of the firms financial condition. The income statement reports on the achievement of the firm. The statement of specie flows reports the cash receipts and cash outflows class according to operating, investment and financing activities. The statement of stockholders comeliness reports the amounts and sources of changes in equity from transactions with owners. The foot nones of the financial statements allow uses to repair sound judgment of the amount, timing and uncertainty of the estimates reported in the financial statements. The intimately accurate way to measure the results of try activity would be to measure them at the measure of the go-aheads ultimate liquid ation. Business, government, investors, and various new(prenominal) user groups, however, tummynot wait indefinitely for such development. If accountants did not provide financial information periodically, someone else would.

The periodicity or clip period assumption simply implies that the economic activities of an enterprise can be divided into artificial time periods. These time periods vary, only the most common are monthly, quarterly, and yearly. The information must(prenominal) be time-tested and relevant. This requires that information must be concordant and like over time and also be provided on a timely basis. The shorter the time period, the more difficult it bec omes to coif the veracious net income for ! the period. A months results are usually fiddling reliable than a quarters results, and a quarters results are likely to be less reliable than a years results. Investors desire and demand that information be quickly processed and disseminated; yet the quicker the information is released, the more it is subject...If you want to get a full essay, parade it on our website: OrderEssay.net

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